APPALACHIAN R EGIONAL C OMMISSION

FY 2025 Performance Budget Justification

As Submitted by the Federal Co-Chair to the Appropriations Committees of the 

United States House of Representatives and Senate

MARCH 2024
APPALACHIAN R EGIONAL C OMMISSION

FY 2025 Performance Budget Justification

As Submitted by the Federal Co-Chair

March 2024

Contents 

FY 2025 Budget Summary and Highlights.....................................................................................................2

Area Development Base Program.............................................................................................................8

POWER Initiative.....................................................................................................................................10

Special Regional Initiative for Distress....................................................................................................11

INSPIRE Initiative for Substance Abuse Mitigation.................................................................................11

Appalachian Energy Hub.........................................................................................................................12

Local Development Districts ...................................................................................................................12

Salaries and Expenses.............................................................................................................................12

Program Justification: Area Development Base Program...........................................................................17

Goal 1: .....................................................................................................................................................18

Goal 2: .....................................................................................................................................................19

Goal 3: .....................................................................................................................................................19

Goal 4: .....................................................................................................................................................21

Goal 5: .....................................................................................................................................................21

Program Justification: POWER Initiative.....................................................................................................24

POWER Initiative Funding: Examples of Projects....................................................................................28

Program Justification: Special Regional Initiative for Distress....................................................................30

Program Justification: INSPIRE Initiative for Substance Abuse Mitigation.................................................33

INSPIRE Initiative Funding: Examples of Projects ...................................................................................34

Performance and Evaluation.......................................................................................................................37

Salaries and Expenses.................................................................................................................................40

Operational Effectiveness Initiative............................................................................................................44

ARC Dashboard: Operational Effectiveness Initiatives ...........................................................................44

Appendix A..................................................................................................................................................47

High-Poverty Counties in the Appalachian Region, 1960 and 2017–2021 .............................................47

Appendix B..................................................................................................................................................48

County Economic Status in Appalachia, FY 2024 ....................................................................................48

County Economic Status Designations in the Appalachian Region, FY 2024..........................................49

Appendix C ..................................................................................................................................................52

ARC Organization ....................................................................................................................................52
FY 2025 Performance Budget Justification—2

FY 2025 Budget Summary and Highlights 

The Federal Co-Chair of the Appalachian 

Regional Commission (ARC, the 

Commission) requests $200 million to fund 

the programmatic activities for Fiscal Year 

(FY) 2025. This represents level funding 

with the amount appropriated by Congress 

for FY 2023 as well as a 2024 Annualized 

Continuing Resolution level. ARC’s funding 

has increased steadily in the last decade, 

and ARC has judiciously increased capacity 

internally and with state partners to meet 

the demands of deploying this new level of 

funding as well as the funds provided by the 

Infrastructure Investment and Jobs Act 

(IIJA) funds. The IIJA provides $1 billion for 

ARC activities over five years, with $200 million appropriated annually from FY 2022 through FY 

2026. The Act also reauthorized the agency though FY 2026 and added three new counties. This 

combination of funding presents a unique opportunity for ARC to make larger investments and 

address some of the systemic challenges that have hindered development while providing gap 

funding and launching new ideas in Appalachia. 

Appalachia Envisioned: A New Era of Opportunity | ARC Strategic Plan Fiscal Years 2022–2026 

formalized the mission to innovate, partner, and invest to build community capacity and 

strengthen economic growth in the Appalachian Region (the Region). This plan reflects directives 

included in Executive Order No. 13985, “Advancing Racial Equity and Support for Underserved 

Communities Through the Federal Government,” which guides agencies to address barriers that 

have prevented “underserved communities” from participating fully in aspects of economic, 

social, and civic life. Internally, ARC piloted a summer internship program, recruiting students 

from the Region’s colleges and universities in FY 2023. The program proved extremely successful 

and will be expanded in future yearsto target historically black colleges and universities (HBCUs), 

first generation college students, and/or students from economically distressed communities. 

ARC will continue to assist communities in Appalachia with accessing other federal resources and 

designing transformational activities that diversify the Appalachian economy. 
FY 2025 Performance Budget Justification—3

ARC’s FY 2025 funding request includes $85 million to continue the Area Development Base 

Program and $31 million for special regional initiatives for distress to continue to address the 

specific needs of individual states through a bottom-up development process. This request 

includes funding for three regionally competitive initiatives: $65 million for the Partnerships for 

Opportunity and Workforce and Economic Revitalization (POWER) Initiative, designed to assist 

communities with economic transformation after the downturn of the coal economy; $13 million

to address workforce challenges caused by the Region’s drug crisis through 

INvestments Supporting Partnerships In Recovery Ecosystems (INSPIRE); and $5 million for 

energy hub development work, for which a Notice of Solicitation of Applications (NOSA) will be 

released in FY 2024. This combination of programmatic strategies enables ARC to address new 

and existing economic challenges at both micro and macro levels. Using the IIJA funding, ARC

launched the Appalachian Regional Initiative for Stronger Economies (ARISE) to drive large-scale, 

regional economic transformation through multi-state collaborative projects and READY 

Appalachia to provide a series of capacity-building programs targeting specific sectors. In FY 2024, 

ARC continues to offer a series of in-person workshops, Getting the Grant: Successfully Applying 

for ARC Funding Opportunities, designed to help prospective applicants prepare to submit 

applications for ARC’s 2024 regionally competitive funding opportunities: ARISE, INSPIRE, and 

POWER. These activities will continue through FY 2025.

These opportunities, along with the Area 

Development Base Program, will further ARC’s

mandated mission. Congress created ARC with 

the realization that the complex challenges of 

the geographically isolated, economically 

disadvantaged 13-state Appalachian Region 

required a tailored approach to overcome 

systemic generational poverty and to diversify 

and transform the economy. ARC charts its 

progress in establishing economic equity and 

achieving its mission with an index that 

compares the economic condition of

Appalachian counties with all the counties in the 

nation based on unemployment, per-capita 

income, and poverty rates. Figure 1, which shows the index, demonstrates that Appalachia has 

proportionally more of the economically weakest counties and fewer of the economically 

strongest counties compared to the rest of the nation. When this index shows an equal share of 

counties across each quartile, Appalachia will be at socioeconomic parity with the nation.

Figure 1 – Number of Appalachian Counties by 

Economic Quartile, FY 2024
FY 2025 Performance Budget Justification—4

Appalachia has made significant progress since the inception of ARC:

• The number of high poverty counties in Appalachia has been cut by 60%, from 297 in 1960 

to 116 today.

• The regional poverty rate has been cut by more than half, from 30.9% in 1960 to 14.5% 

today (2017–2021 period).

• The percentage of adults with a high school diploma has nearly tripled since 1960, and 

students in Appalachia now graduate from high school at nearly the same rate as that of 

the nation as a whole.

• In the past five years, ARC-funded infrastructure projects have provided 343,463

Appalachian households and businesses with access to clean water and sanitation 

facilities.

However, the Region continues to lag behind the nation and encounter new challenges, such as 

the downturn in the coal economy and disproportionate rates of substance use disorder:

• At $31,098, per capita income in the Appalachian Region was 83% that of the U.S. average 

of $37,638 during the 2017–2021 period.

• The Appalachian Region lost over 625,000 jobs between 2007 and 2010, with losses taking 

place both during and after the Great Recession. It took the Region until 2015 to achieve 

its pre-recession level of employment; meanwhile, the United States as a whole reached 

its pre-recession level of employment in 2013. More recent trends continue to show a 

gap between the Region and the country as a whole: Appalachia saw its total employment 

grow by 4.2% from 2016–2021 compared to 8.0% in the United States as a whole.

• Appalachia lagged behind the nation in the proportion of adults with a bachelor’s degree 

(26% compared with 33.7% for the nation) in the 2017–2021 period.

• Between 2011 and 2022, coal mining employment in Central Appalachia decreased 66%—

over 20,000 jobs were lost—and it is not expected to return to its historic high. 

• The nation’s substance abuse crisis disproportionately impacts Appalachia, where in 

2021, overdose-related mortality rates for the Region’s 25–54-year-old age group—those 

in their prime working years—were 72% higher than for the same age group in the 

country’s non-Appalachian areas. 
FY 2025 Performance Budget Justification—5

Employment growth in the Appalachian Region 

lagged behind that of the United States overall 

between 2000 and 2020. While the country overall 

saw an increase of 15% in total employment, the 

Region experienced growth of just 4%. Central 

Appalachia fared the worst among the subregions, 

losing over 8% of its total employment over the 

time period. Because Appalachia features a 

network of single-sector economies—previously 

focused substantially on mining and 

manufacturing, both of which have struggled 

recently—economic downturns such as that 

experienced in COVID tend to hit the Region harder 

and traditionally last longer than in other areas of 

the nation. Figure 2 illustrates this trend through 

previous periods of economic downturn.

ARC is not duplicative of other federal programs, 

but rather complementary. By using its grassroots 

delivery system, ARC can extend the reach of 

programs such as those funded by the American 

Rescue Plan Act (ARPA) into some of the most 

economically distressed parts of the nation. The 

ARC Strategic Plan focuses on resilience, 

innovation, sustainability, and equity; the plan

positions ARC to collaborate with both federal and 

Infrastructure Investment and Jobs Act 

(IIJA)

FY 2022 – FY 2024

Complementary Activities

Appalachian Regional Initiative for 

Stronger Economies (ARISE) provides 

$227 million for an initiative to drive 

large-scale, regional economic 

transformation through multi-state 

collaborative projects across 

Appalachia.

READY Appalachia provides $29 million 

for a community capacity-building 

initiative offering flexible funding to 

Appalachia nonprofit organizations, 

community foundations, local 

governments, and Local Development 

Districts to obtain resources to 

strengthen these important 

organizations.

Base Area Development funding was 

increased by $300 million to continue 

the ongoing development work on a 

state-by-state basis and increase the 

allowable federal share of funding with 

other national programs such as ARPA 

through ARC’s flexible statutory 

authority. 

Through expanded research capabilities

provided by this funding, ARC can offer 

increased regional data and analysis to 

applicants for other national programs 

to potentially increase the number of 

successful Appalachian applications. 

Figure 2 – Percent Change in Employment, All Industries, 

2002–2007, 2007–2012, and 2012–2017
FY 2025 Performance Budget Justification—6

nonprofit partners to address the needs of the Region. Consistent with the Biden 

Administration’s emphasis on equity, ARC targets its resources to the areas of greatest need. In 

FY 2023, 70% of ARC’s grant dollars supported projects that primarily or substantially benefited 

economically distressed counties and areas. 

Examples of federal partnerships include the following:

• Beginning in FY 2019, ARC has partnered annually with the U.S. Department of Labor’s 

Employment and Training Administration to design workforce development initiatives 

through the Workforce Opportunity for Rural Communities (WORC) Grant Initiative, 

funded through the Department of Labor (DOL). The WORC Initiative is designed to 

address persistent economic distress by aligning community-led economic and workforce 

development strategies and activities to ensure long-term economic resilience and 

enable workers to succeed in current and future job opportunities. To date, with ARC’s

programatic support, the DOL has awarded over $80 million in total funding to workforce 

development projects in Appalachia. These projects have provided and will continue to 

provide valuable career, training, and support services to dislocated workers, new 

entrants to the workforce, and incumbent workers in counties, parishes, or areas 

currently underserved by other resources.

• In FY 2021, ARC partnered with the U.S. Environmental Protection Agency (EPA) on a 

community capacity-building pilot program for the Region. Training components focused 

on deployment of ARPA funds to reignite local economies. That partnership was the 

genesis for READY Appalachia and was expanded through the IIJA funding.

• Through a separate partnership with the EPA, the Commission joined the United States 

Forest Service and the Northern Border Regional Commission in 2022 to sponsor 12 

Appalachian communities to take part in the Recreation Economy for Rural Communities 

(RERC) Program, a planning assistance program for communities wishing to bolster their 

outdoor recreation sector and connect it with other economic assets in their 

communities. The program features a two-day workshop, extensive support calls, and the 

creation of an action plan that includes potential sources of funding for the actions. As of 

August 2023, all 12 Appalachian communities have had their workshops and are in various 

stages of finalizing their actions plans. The workshops and technical assistance occurred 

throughout FY 2023. This partnership was renewed for FY 2024.

• In FY 2022, in conjunction with participation in the Interagency Working Group on Coal 

and Power Plant Communities and Economic Revitalization, ARC joined the Biden 

Administration’s Rural Partners Network. In FY 2023, ARC partnered with the U.S. 

Department of Agriculture (USDA) and Kentucky Highlands Investment Corporation to 

host a forum in Appalachian Kentucky designed to build collaboration, capacity, and 
FY 2025 Performance Budget Justification—7

relationships by connecting community networks with targeted federal and civic partners.

In FY 2024, ARC partnered with the USDA to provide a day and a half of capacity building 

and in-depth application training for all nine Kentucky Area Development Districts. Fortyfive economic developers engaged in the training. ARC will continue to support the 

mission of the Rural Partners Network with activities that promote job creation, 

infrastructure development, and community improvement. 

• In an effort to coordinate broadband implementation with National Telecommunications 

and Information Administration (NTIA) funding throughout the Region, ARC participates 

in Appalachian Cross Connect, a group of state broadband directors from all 13 

Appalachian states that convene to discuss issues related to broadband. The group shares 

lessons learned, provides feedback on ARC’s broadband priorities and policies, and 

identifies potential opportunities to collaborate across state borders.

Nonprofit, philanthropic, and private sector investors are important partners as well:

• When economic research indicated the scarcity of investment capital in the Region, 

Appalachian Community Capital (ACC) was launched in response, raising an additional $12 

million in debt and equity from Bank of America, Deutsche Bank, Calvert Foundation, the 

Ford Foundation, Mary Reynolds Babcock Foundation, the Claude Worthington Benedum 

Foundation, the Annie E. Casey Foundation, and BB&T Bank. From 2015 (when ACC first 

began lending) through December 2022, ACC deployed $33 million in financing to 

member Community Development Financial Institutions (CDFIs), which have financed 121 

small business loans that have created or retained almost 3,000 jobs in Appalachia. Fiftythree percent of loans were disbursed to minority and/or women-owned businesses.

• At the onset of the COVID crisis, ARC worked with ACC to invest $3.75 million for an 

Emergency Business Response Assistance Program to strengthen and stabilize the 

Region’s CDFIs and other mission-driven development finance lenders serving struggling 

small businesses. 

ARC’s program is producing results. Investments of $322.9 million in grant funds across all 

initiatives in FY 2023 attracted an additional $406.6 million in other project funding, an

investment ratio of 1.3 to 1, and $3.13 billion in non-project leveraged private investment, a ratio 

of 10 to 1. These projects are anticipated to produce the following results: 

• 50,189 jobs created or retained

• 46,990 students, workers, and leaders trained in new skills

• 52,199 businesses and households with access to improved infrastructure

• 8,139 businesses created or strengthened
FY 2025 Performance Budget Justification—8

• 1,700 communities with enhanced capacity

The FY2025 Congressional Justification request reflects directives from Executive Order No. 

14008, “Tackling the Climate Crisis at Home and Abroad,” which established the Interagency 

Working Group on Coal and Power Plant Communities and Economic Revitalization, a

collaborative effort of multiple federal agencies to promote and support economic revitalization 

in communities impacted by coal-specific job losses. ARC uses its membership in this group to 

participate in the national conversation and to bring the specific needs and issues of the Region 

to the immediate attention of partner federal agencies. The ARC Federal Co-Chair serves as the 

Chair of the Community Engagement Subcommittee and continues to collaborate on actions 

designed to deploy solutions and information to build capacity. This includes a multi-agency 

webinar focused on water, sewer, and broadband infrastructure programs in coal-impacted 

communities in July 2023 and an in-person event in Pennsylvania announcing federal resources

to assist employees in October 2023. 

Each of ARC’s initiatives are briefly summarized and will be described in more detail in the 

sections that follow. 

Area Development Base Program

Through the Area Development Base Program, ARC continues to address widespread

generational poverty through a flexible bottom-up approach, working with state and local 

partners to implement programmatic activities in a way that is best suited to the unique needs 

of each state. ARC will innovate, partner, and invest to build community capacity and strengthen 

economic growth in Appalachia through implementation of Appalachia Envisioned: A New Era of 

Opportunity | ARC Strategic Plan Fiscal Years 2022–2026. ARC’s unique structure of state and 

local collaboration presents an opportunity to assist communities in coordinating significant 

funding available through ARC and partner federal agencies. ARC’s statutory authority enables it 

to increase the allowable federal share of funding in a project so that this funding can be 

combined efficiently with funds from other federal partners.

The IIJA provides ARC a total of $1 billion over five years, starting in FY 2022 with $200 million 

annually to accelerate economic development in Appalachia. With the goal of achieving 

economic equity, ARC developed a complementary investment strategy including components of 

capacity building, multi-state collaboration, and increased attention to needs specific to 

communities through ARC’s formula of distribution to member states. This enhanced capacity 

and available funding will enable states to design large-scale transformational projects that might 

otherwise have a local match barrier. Figure 3 details ARC’s FY 2023 spending (across all 

initiatives) and indicates that ARC’s programmatic capacity has increased with the spending,

resulting in historic levels of investment. The budget requests $85 million to continue this work 

in FY 2025.
FY 2025 Performance Budget Justification—9

Figure 3 – ARC Projects – FY 2023
FY 2025 Performance Budget Justification—10

POWER Initiative

The economic downturn of the coal industry has had 

a significant impact on Appalachia. The COVID

pandemic depressed already declining coal 

production across the United States. Coal production 

in Appalachia fell by more than 65% overall between 

2005 and 2020. This loss is significantly higher than 

the national rate of decline of approximately 54%.1

Figure 4 indicates the dramatic reduction in coal 

production across the three Appalachian basins, with 

Central Appalachia output plunging by 80%, resulting 

in the loss of thousands of jobs. ARC designed the 

regionally competitive Partnerships for Opportunity 

and Workforce and Economic Revitalization Initiative

(POWER) Initiative to specifically address economic 

inequity through a tailored development approach.

This initiative is included as a pilot program in the 

Biden administration’s Justice40 initiative, an effort to 

ensure that at least 40% of the overall benefits from 

federal investments in climate and clean energy serve disadvantaged communities. 

Since the launch of the 

POWER Initiative in 2015, 

ARC has invested nearly 

$424.1 million in 519 

projects impacting 360 coalimpacted counties. A new 

evaluation conducted by 

Chamberlin/Dunn indicates 

that most POWER projects 

met or exceeded output and 

outcome targets, with ARC’s 

investments projected to 

have helped create or retain 

more than 39,600 jobs and 

over 100,000 workers and 

1 https://www.arc.gov/wp-content/uploads/2021/04/Coal-and-the-Economy-in-Appalachia_Q4_2020-Update.pdf. 

From POWER to EDA Build Back Better

Multiple POWER grants to Coalfield Development 

Corporation (Coalfield) in Huntington, West 

Virginia, along with individual POWER grants to 

six of Coalfield’s partners, helped position the 

organization to win $62.8 million, the largest 

award in the Economic Development 

Administration’s (EDA) recent Build Back Better 

Regional Challenge. The project focuses on 

renewable energy, sustainable mine land 

reclamation, clean manufacturing, and 

entrepreneurship in the heart of coal country. A 

large portion of the required match was provided 

by ARC through POWER grants to Coalfield’s 

partners, including Generation WV, the WV 

Community Development Hub, Advantage Valley, 

the WV Hive Network, and Rural Action in Ohio. 

From its inception, POWER has emphasized 

regional projects built on a broad network of 

partnerships. Working in concert and driven by a 

strong common vision, these partners can 

transform the regional economy. 

Million Short Tons

Figure 4 – Coal Production, Appalachian Coal Producing Regions
FY 2025 Performance Budget Justification—11

students for new opportunities in entrepreneurship, broadband, tourism, and other growing 

industries.2 The budget for FY 2025 requests $65 million to continue to assist communities in 

economic diversification through the POWER Initiative. 

Special Regional Initiative for Distress

By law, ARC must direct at least half of its grant funds to projects that benefit economically 

distressed counties and areas in the Region. However, the agency routinely exceeds that 

requirement: in FY 2023, 70% of its appropriations were invested in distressed counties or areas. 

ARC gauges its long-term progress toward helping the Region achieve equity and socioeconomic 

parity with the nation in terms of the gradual reduction in the number of distressed counties and 

areas over time. FY 2024 demonstrates a slight improvement from FY 2023. While the number of 

distressed counties will remain the same at 82, the number of at-risk counties decreases from 

109 to 101. The number of transitional counties will increase from 218 to 225, and the number 

of competitive counties will increase from 10 to 11.

ARC will continue to make targeted investments in emerging opportunities and activities that 

reduce economic barriers. Continued expansion of the southern automotive and aviation clusters 

offers great potential for job creation in Appalachia. In addition, other challenges such as 

inadequate water, sewer, and broadband infrastructure continue to require substantial 

resources. The budget requests $31 million in FY 2025 to continue to develop projects focusing 

on the reduction/elimination of economic distress in the Region.

INSPIRE Initiative for Substance Abuse Mitigation

The nation’s substance abuse crisis disproportionately impacts Appalachia, where in 2021, 

overdose-related mortality rates for the Region’s 25–54-year-old age group—those in their prime 

working years—were 72% higher than for the same age group in the country’s non-Appalachian 

areas. This disparity indicatesthat the substance abuse crisis is not only a health and public safety 

issue but also a barrier to economic prosperity because of its impact on the Region’s workforce.

COVID, as well as the downturn in the coal economy, has only intensified this issue. This threat 

to economic prosperity makes the substance abuse crisis a priority for ARC. Working through its

Substance Use Disorder Advisory Council (a 24-member volunteer advisory group of leaders from 

multiple sectors from each of the Region’s 13 states), ARC designed and launched a strategy to 

address the workforce impacts of this epidemic. The strategy, INvestments Supporting 

Partnerships In Recovery Ecosystems (INSPIRE), is a regionally competitive request for proposals 

to develop projects focused on workforce reentry strategies that both strengthen local 

economies and provide support for those in long-term recovery. Since INSPIRE was established 

in 2021, ARC has invested $43.4 million across 130 projects. Together, the projects will impact 

2 https://www.arc.gov/report/power-initiative-evaluation-the-power-of-change/
FY 2025 Performance Budget Justification—12

349 Appalachian counties, improve 2,178 businesses, and help prepare 9,772 individuals for 

new opportunities in the workforce. This funding reflects the Biden administration’s focus on this 

issue. This budget requests $13 million to continue to fund projects to build the recovery 

ecosystem in the Region in FY 2025.

Appalachian Energy Hub

In FY 2024, ARC is launching a NOSA to solicit projects involving research, analysis, and planning

regarding the economic impact of an ethane storage hub in the Appalachian Region that supports 

a more-effective energy market performance due to the scale of the project and that will help 

establish a regional energy hub in Appalachia for natural gas and natural gas liquids, including

hydrogen produced from the steam methane reforming of natural gas feedstocks.

Local Development Districts

Grassroots participation in the Area Development Base Program comes from 74 Local 

Development Districts (LDDs), multi-county agencies and boards composed of local elected 

officials and businesspeople. The budget requests $8 million to continue to support the work of 

LDDs in FY 2025.

Salaries and Expenses

The budget requests funding for salaries and expenses totaling $14.22 million for the full costs of 

both the Office of the Federal Co-Chair, its immediate staff and the Office of the Inspector 

General; as well as programmatic costs of the Commission, and the 50% federal share for 

administrative expenses of the Commission staff. As previously mentioned, ARC initiated an 

internship program targeting students from higher learning institutions within the Appalachia 

Region. In FY 2023, three candidates were selected to staff divisions based on position 

descriptions for each opening. The program is being expanded in FY 2024. ARC will continue to 

provide extensive technical assistance to underserved communities, removing economic barriers 

and engaging communities in accordance with Executive Order No. 13985 and Executive Order 

No. 14008. Details on staffing are provided below in Table 1. 

ARC has allocated portions of its IIJA appropriations from FY 2022 through FY 2026 to cover the 

costs of administering IIJA programs. 
FY 2025 Performance Budget Justification—13

Table 1 – Annual Appropriation Budget – FY 2025 Request

Table 1 details ARC’s funding request of $200 million. ARC’s appropriation has increased 

significantly over the last decade, and ARC has judiciously increased internal capacity to 

successfully deploy and monitor this level of funding with FY 2023 investing record funding.
FY 2025 Performance Budget Justification—14

Table 2 – IIJA Detail
FY 2025 Performance Budget Justification—15

The IIJA provided ARC with $1 billion, thereby providing budget authority of $200 million a year 

for fiscal years 2022 through 2026. Table 2 provides detail on the Commission’s allocations of IIJA 

funds for FY 2023–FY 2024 and planned allocations for FY 2025. This emergency discretionary 

funding builds upon the base of programmatic efforts funded by annual appropriations. ARC is 

directing IIJA resources to accelerate economic transformation and build much-needed capacity 

in some of the most economically distressed areas of the nation. 

Pending Commission approval, ARC will fund the following programs and activities in FY 2025:

• State Area Development and Distressed Counties Initiative: The funds will be allocated to each 

of the 13 Appalachian Region states using the formulas for area development and distressed 

counties that currently determine state allocations under ARC’s regular appropriation. The 

factors in the formulas include economic condition, population, land area, and level of 

education. To qualify, applications must be submitted by the respective state governor and 

must demonstrate how the proposed projects would advance at least one of ARC’s strategic 

investment priorities. One-third of the funding is allocated exclusively for the benefit of 

economically distressed counties.

• Appalachian Regional Initiative for Stronger Economies (ARISE): ARC launched this initiative

to drive large-scale, regional economic transformation through multi-state collaborative 

projects. In FY 2023, ARC awarded $50.4 million to 17 projects that expand broadband access, 

educate workers in emerging sectors, bolster green manufacturing, and support workforce 

and business opportunities across 12 states. Funding for this initiative will be awarded on a 

rolling basis so initial impacts will be realized almost immediately. With projects underway, 

ARC contracted Chamberlin/Dunn to evaluate initial implementation and identify best 

practices and lessons learned to share with new applicants. 

• READY Appalachia: ARC expanded its recently launched interagency pilot program of 

strengthening local capacity, enabling communities to take better advantage of federal and 

other resources and create a stronger economic future. The first track of the initiative, READY 

Nonprofits, launched in July 2022; ARC announced 75 nonprofit participants representing 52 

counties across all 13 Appalachian states and cover a wide variety of sectors. Seventy-four 

organizations successfully completed the training, and thus were eligible to apply for a 

$25,000 organizational capacity grant from ARC with optional match commitment. Seventythree of those organizations submitted applications, and by the end of FY 2023, 59 projects 

had been approved for a total of $1.5 million. 

• READY LDDs: The second targeted track, READY LDDs, launched in October 2022. This track 

accepts applications from ARC’s Local Development Districts. In FY 2023, ARC funded 41 

READY LDD grants for a total of $3.6 million. 
FY 2025 Performance Budget Justification—16

• READY Local Governments Training Program and READY Community Foundations Training 

Program: In FY 2023, ARC also launched a Request for Proposals (RFPs) for contractors to 

support the third and fourth tracks, READY Local Governments Training Program and READY 

Community Foundations Training Program, as well as the development of a long-term 

capacity strategy for fiscal years 2025–2029.

• Other Programmatic Activities: Funding for other programmatic activities increases 

investment in research, mapping and data analysis, program evaluation, and technical 

assistance. These tools help inform funding decisions by both ARC and outside organizations. 

Funding for ARC’s Appalachian Entrepreneurship Academy, Oak Ridge Summer STEM 

Program, and the Appalachian Collegiate Research Initiative (ACRI), formerly known as the 

Appalachian Teaching Project, have been shifted to IIJA and will no longer draw from annual 

appropriations. 
FY 2025 Performance Budget Justification—17

Program Justification: Area Development Base Program 

The Federal Co-Chair of the Appalachian Regional Commission (ARC, the Commission) requests a 

total of $200 million, $85 million of which will continue the activities in the Area Development 

Base Program and includes enhanced focus on technical assistance necessary to prepare 

communities for the influx of funding from other national programs. This funding addresses the 

challenges and opportunities of the Region as it continues a major economic transition. ARC’s 

funding has increased in the last decade. ARC has increased capacity internally and with state 

partners to meet the demands of deploying this new level of funding as well as the funding 

provided through the Infrastructure Investments and Jobs Act (IIJA). With this capacity in place, 

ARC can continue its efforts to focus on the severe economic distress that continues to challenge 

Appalachia. The funding analysis provided in Table 1 illustrates the allocation of a $200 million 

appropriation across all ARC initiatives with administrative costs. 

ARC’s Area Development Base Program relies on a flexible bottom-up approach to economic 

development, with funds allocated to states based on economic indicators such as economic 

condition, population, land area, and level of education. Appalachian state partners solicit 

applications designed to reflect the goals and objectives of the ARC Strategic Plan. Eligible funding 

uses include activities that build Appalachian businesses; build Appalachia’s workforce 

ecosystem; build Appalachia’s infrastructure; build regional culture and tourism; and build 

community leaders and capacity. Final approval of all proposed investments resides with the 

Federal Co-Chair of ARC. Eligible applicants include but are not limited to states, local

governments, and nonprofits both with and without 501(c)(3) status. Grants range in size from 

$10,000 for grass-roots demonstration projects to $5 million for large critical infrastructure 

activities. In a complementary strategy, ARC is also encouraging larger multi-state grant 

applications through funding made available by the IIJA. 

Program implementation reflects local priorities, enabling communities to tailor the federal 

assistance to their individual needs. This program extends the reach of other federal programs

into the most challenged parts of Appalachia by providing the necessary training and gap funding 

to prepare economically distressed communities to compete successfully for funding from

national programs. Finally, this program helps attract private sector investment to areas that 

otherwise would not likely be considered competitive investment opportunities. In FY 2023, 

investments of $322.9 million in grant funds across all initiatives attracted an additional $406.6 
FY 2025 Performance Budget Justification—18

million in other project funding, an investment ratio of 1.3 to 1, and $3.13 billion in non-project 

leveraged private investment, a ratio of 10 to 1.

ARC’s strategic plan, Appalachia Envisioned: A New Era of Opportunity, development process

included comprehensive community engagement through which approximately 2,000

participants shared insights on strengths, challenges, and opportunities facing Appalachia, along 

with ideas to advance economic prosperity. This plan will guide ARC programmatic activities and 

reflects the Biden administration’s focus on resilience, innovation, sustainability, and equity. The 

updated goals described below reflect stakeholder input and economic analysis of conditions in 

Appalachia, including the economic impact from COVID. 

Goal 1: Building Appalachian Businesses

Strengthen and diversify the Region’s economy through inclusive economic development 

strategies and investments in entrepreneurship and business development. 

Collaborative and inclusive approaches to economic development in Appalachia are essential to 

supporting the Region’s businesses and industries and ensuring economic opportunity for its 

residents. ARC’s investments will emphasize the importance of investment in economic growth 

strategies that capitalize on the Region’s unique assets and prioritize assistance for small 

businesses and entrepreneurs. Job creation is increasing more slowly in the Region than in the 

nation as a whole. The number of jobs in the nation has jumped 79% since 1980, while the 

number of jobs in Appalachia has increased only 49% over the same time period.

3 As the Region 

transitions from single-sector economies, it will be necessary to help both new and established

businesses and industries to expand their reach in national and international markets. 

A program evaluation released in FY 2023 assessed the impact of ARC’s business development 

grants that were closed between 2017 and 2021; the evaluation found that those investments 

facilitated the creation or retention of 29,352 jobs and the establishment of 1,944 new 

businesses in the Appalachian Region. Additionally, ARC’s business development grant projects 

3 Woods & Poole Complete Economic and Demographic Data Source.

Entrepreneurial Support of Manufacturing Sectors

In FY 2023, ARC made a grant of $750,000 to Catalyst Connection for Shale POWER 2.0: Supporting Appalachian 

Businesses to Diversify into the Shale-Manufacturing Sectors. The three-year project will reach manufacturers 

in a three-state region and leverage the recent international developments that make the Appalachian Basin a 

critical U.S. energy asset. With ARC's investment, 80 businesses will be impacted because of the services 

received and almost all counties (11) will have a business improved, leading to sustaining jobs in each 

community. Additionally, 160 jobs will be created, and 880 jobs will be retained. The businesses improved are 

projected to experience an average of $300,000 of private investment, for a total of $24 million of leveraged 

private investment.
FY 2025 Performance Budget Justification—19

attracted $923 million in private investment to the Region, resulting in increased economic 

opportunity for its 26.3 million residents. 4

Goal 2: Building Appalachia’s Workforce Ecosystem

Expand and strengthen community systems (education, healthcare, housing, childcare, and 

others) that help Appalachians obtain a job, stay on the job, and advance along a financially 

sustaining career pathway.

Developing and sustaining a strong workforce is a critical component of economic development, 

both in Appalachia and across the country. Over the 2017–2021 period, the share of adults with 

a bachelor’s degree or more was 7.7 percentage points lower in Appalachia than in the nation as 

a whole. 

A strong workforce includes not only educational opportunities, but also soft and technical skills 

to meet local industry needs as well as access to fundamental supports to keep workers on the 

job, such as reliable transportation, appropriate healthcare, safe and affordable housing, and 

quality childcare. The Region cannot achieve economic equity and prosperity without investment 

in two key components: talent and skill development and employment support to keep people 

in the labor force and contributing to economic and community development.

Goal 3: Building Appalachia’s Infrastructure

Ensure that the residents and businesses of Appalachia have access to reliable, affordable, 

resilient, and energy-efficient utilities and infrastructure, including water/wastewater systems; 

transportation, including the Appalachian Development Highway System; and reliable, 

affordable broadband. 

Businesses and residents alike require access to affordable, energy-efficient, and reliable 

utilities as well as safe, connected, and strategic transportation systems. However, the Region’s

aging and inadequate infrastructure creates a significant barrier to community prosperity. This

negatively impacts business and talent attraction and retention, workforce development, 

4 https://www.arc.gov/report/evaluation-of-arc-business-development-grants-closed-between-2017-2021/

Heavy Equipment and Diesel Mechanics Training

With the need for post-secondary education growing in recent years as businesses report a lack of skilled workers 

to fill their open positions and as the income gap widens between college and high school graduates, ARC made a 

grant in the amount of $500,000 to Mifflin County Academy of Science and Technology in FY 2023. Funds will be 

used to purchase equipment for post-secondary students enrolled in training for both heavy equipment operators 

and diesel mechanics. The existing training programs in the area cannot train enough students to fill the current 

positions in the market. This program will provide training for 80 students and serve nine businesses during the 

term of the grant. 
FY 2025 Performance Budget Justification—20

community and individual prosperity, and access to healthcare and education. Difficult 

geography, traditionally underfunded infrastructure systems, natural disasters, and declining 

revenue are just some of the barriers to building and sustaining Appalachia’s infrastructure. 

Investments in basic infrastructure and economic 

development readiness planning offer one of the 

largest returns on investment for economic and 

community prosperity in Appalachia. Basic 

infrastructure includes water, sanitary sewer, and 

municipal storm wastewater; energy (including 

electric, heat, oil and gas, and alternative energy 

sources); and, where necessary, stormwater and 

emergency management infrastructure to build 

resilience and protect against natural disasters. 

Roughly 20% of the Region’s population is not 

served by a community water system (compared 

with 12% nationally), and 47% of Appalachian 

households are not served by a public sewage 

system (compared with 24% nationally).5 In FY

2024, ARC launched an evaluation of the status of

infrastructure status in the Region which will be 

conducted by UNC Chapel Hill. 

As the pandemic increased workers’ reliance on remote interaction, high-speed Internet access 

has become even more important. During the 2017–2021 period, 82.8% of Appalachian 

households had a broadband Internet subscription, more than four percentage points below the 

national average of 87%. There are also signs of a rural-urban digital divide within the Region: In 

42 Appalachian counties, less than 70%of households had a broadband subscription. All but five 

of these counties were outside metropolitan areas, and almost half were in the most rural 

counties.6 Many communities in the Region may be at risk of being left behind. ARC’s investments 

in broadband and data infrastructure help Appalachian communities—especially those in rural 

and/or distressed counties and areas—compete and participate in the global economy. Ongoing 

opportunities exist for convening, coordinating, planning, mapping, and funding investments in 

broadband deployment and smart grids. With additional funding provided through the IIJA, ARC 

5 EFC at UNC Chapel Hill, Drinking Water and Wastewater Infrastructure in Appalachia: An Analysis of Capital 

Funding and Funding Gaps 2005.

Estimated Use of Water in the United States County-Level Data for 2000, U.S. Geological Survey. 

Estimated Use of Water in the United States County-Level Data for 2015, U.S. Geological Survey. 6 ARC Chartbook as compiled from American Community Survey Data (2017-2021). 

Critical Infrastructure

In FY 2023, ARC made a grant of $1,452,000 to 

the Town of Junior, in economically distressed 

Barbour County, West Virginia, for a Water 

System Improvement Project. In 2017, a sanitary 

survey conducted by the Town of Junior revealed 

that only 50% of the town’s overall water use 

could be accounted for due to deterioration of 

water mains and mainline valves. The State of 

West Virginia Bureau for Public Health requires 

water accountability to be at a minimum of 

85%, so the system was out of compliance. 

Match funding is provided through a USDA Rural 

Development loan and a grant from the WV 

Infrastructure and Jobs Development 

Council. Once complete, the project will result in 

improved service to 395 households and help 

bring the system back into compliance with state 

regulations.
FY 2025 Performance Budget Justification—21

is collaborating with National Telecommunications and Information Administration (NTIA) to 

develop complementary strategies for addressing broadband deployment in Appalachia. 

Congress authorized construction of the Appalachian Development Highway System (ADHS) as 

part of ARC’s original enabling legislation in 1965. The completion of the ADHS remains a priority 

for ARC. Roads, highways, and public and personal transit are critical not only for economic 

growth and prosperity but also for quality of life and accessing employment opportunities and 

related employment supports that residents need. The Region continues to struggle with 

equitable access to reliable, quality transportation systems that can efficiently and conveniently 

transport goods and people. Increased funding and planning support for transportation 

infrastructure improvements and innovations are needed for the Region to continue to be an 

attractive place to live, work, and do business.

Goal 4: Building Regional Culture and Tourism

Strengthen Appalachia’s community and economic development potential by preserving and 

investing in the Region’s local cultural heritage and natural assets.

Appalachia has unique downtown communities, a 

vibrant cultural and arts tradition, and diverse natural 

spaces. Preserving and leveraging these regional assets 

to support quality of life for residents, community 

development, economic opportunity, and tourism is an 

important component of economic development. 

Investments in the revitalization of Appalachian 

downtowns, maintenance and promotion of the 

Region’s arts and cultural heritage, and the 

preservation and harnessing of natural resources and 

outdoor spaces for recreation and tourism can be 

transformational.

Appalachia has a rich history in a range of arts, music, 

regional foods, and heritage sites. Investments in 

these sectors will support community resilience and 

development, advance place-based economic 

development, and expand opportunities for residents and visitors alike. The Region offers a 

myriad of natural assets—mountains, rivers, lakes, forests, parks, waterfalls, and trails. Plentiful 

outdoor recreation activities provide key strengths for the Region and will help fuel the tourism 

economy and increase employment opportunities. 

Goal 5: Building Community Leaders and Capacity

Invest in the capacity of local leaders, organizations, and communities to address local 

Equity Investing Strategies

Leadership and Capacity Building

ARC granted $320,000 to the Berea College 

Brushy Fork Leadership Institute for the Brushy 

Fork Community Leadership Program: People 

Ready Communities in FY 2023. The project will 

utilize the Brushy Fork Leadership Institute's 

already-established People Ready Communities 

to conduct a series of workshops for community 

leaders and, following that, a mini-grant program. 

The People Ready Communities concept is 

centered around preparing communities sustain a 

diverse workforce, industry, tourists, and 

entrepreneurship development. The project is 

expected to result in 120 participants and eight

communities improved, and eight programs 

implemented.
FY 2025 Performance Budget Justification—22

challenges by providing technical assistance and support to access resources, engage partners, 

identify strategies and tactics, and conduct effective planning and project execution.

Achieving economic development goals for the Region is dependent upon a community’s ability 

to prioritize challenges and implement impactful solutions. Many Appalachian communities, 

particularly in rural and/or economically distressed areas, lack the capacity at the leadership, 

organizational, or community level to effectively drive the planning and implementation of 

strategies, projects, and investments.7 Out-migration and a lack of focus and investment in 

leadership and community development has left many communities in the Region without the 

capacity needed to capitalize on funding opportunities and steer investments to successful 

outcomes. Building capacity throughout the Region has long been a focus of ARC; the 

dedicated funding made available through the IIJA provides ARC the opportunity to expand its

focus on leadership and capacity building. 

ARC has consolidated its programmatic offerings in leadership development activities into a 

single unit to achieve economies of scale. ARC’s Appalachian Entrepreneurship Academy, Oak 

Ridge Summer STEM Program, and the Appalachian Collegiate Research Initiative 

(ACRI), formerly known as the Appalachian Teaching Project, will be shifted to funds made 

available through the IIJA, while the Appalachian Leadership Institute will continue to be funded 

through a partnership with the United States Department of Agriculture. Academies and 

institutes offer the following components:

• ARC Oak Ridge Summer STEM Program is a two-week, hands-on learning program for 

teachers and high school and middle school students delivered through Oak Ridge 

Associated Universities. 

• Appalachian Entrepreneurship Academy is an experiential learning program to build high 

school students’ entrepreneurship skills. 

• Appalachian Collegiate Research Initiative (ACRI), formerly known as the Appalachian 

Teaching Project, is an applied research program where participating colleges and 

universities offer a directed seminar that guides students in developing and executing 

field-based research projects specific to the needs of their surrounding communities and 

in alignment with one or more of the ARC strategic goals. 

Appalachian Leadership Institute aims to equip a diverse network of leaders with the skills, 

expertise, and vision to address Appalachia’s most pressing issues. Forty program fellows drawn 

from across ARC's 13 states participate in a nine-month training program featuring workshops 

and collaborative activities. 

7 Evaluation of the Appalachian Regional Commission’s Leadership and Community Capacity Projects: FY 2008–FY 

2015. 
FY 2025 Performance Budget Justification—23

Table 3 – ARC Performance Targets, 2022–2026

Assuming continued funding consistent with the FY 2021 appropriations of $180 million, the 

Commission is committed to achieving above mentioned performance, leverage, matching, and 

distressed county/area targets in pursuit of its mission. Table 3 reflects ARC’s performance 

targetsfor 2022–2026. Future ARC funding changes may necessitate adjustments to performance 

targets. 
FY 2025 Performance Budget Justification—24

Program Justification: POWER Initiative 

The Federal Co-Chair of the Appalachian Regional Commission (ARC, the Commission) requests 

$65 million for FY 2025 to continue the regionally competitive Partnerships for Opportunity and 

Workforce and Economic Revitalization (POWER). As demand for coal has fallen across the United 

States, Appalachia’s coal industry has been disproportionately affected. Between 2005 and 2020, 

coal production in the United States fell about 54%. Most of this decline came in Appalachia, 

where coal production dropped 65%. This severe decline in production has resulted in the loss of 

thousands of jobs across Appalachia.8 Figure 5 illustrates the decline of the coal mining 

production industry in the broader United States and Appalachia. 

Figure 5 – Coal Mining Production in Appalachia and the Rest of the United States

ARC’s POWER Initiative is an equity-based strategy designed to address rural poverty and assist 

Appalachia in better competing in the global economy by funding regionally competitively 

selected projects that emphasize large-scale, multi-jurisdictional activities, engage a broad range 

of partners, and are sustainable and transformational. Eligible funding uses include enhanced job 

training and re-employment activities, job creation activities in existing or new industries, and 

8 https://www.arc.gov/wp-content/uploads/2023/09/Coal-Production-and-Employment-in-Appalachia-2023.pdf
FY 2025 Performance Budget Justification—25

new investment development activities. Eligible applicants include but are not limited to states, 

local governments, and nonprofits both with and without 501(c)(3) status. Grants range in size 

from $100,000 for planning grants to $2 million for multi-state activities. In a complementary 

investment strategy, ARC is encouraging larger grant application submissions through

Appalachian Regional Initiative for Stronger Economies (ARISE) funding recently made available 

through the Infrastructure Investment and Jobs Act (IIJA). 

Figure 6 shows recent changes in coal employment for the coal-producing states in the 

Appalachian Region (the Region). Eastern Kentucky registered the largest drop in coal 

employment between 2005 and 2020 at 82%.9 Historic flooding related to climate change in July 

2022 complicated Kentucky’s challenges. ARC supported Kentucky and other Appalachian states 

by convening discussions with the Federal Emergency Management Administration (FEMA) in 

order to facilitate investment and coordinate assistance. ARC hosted FEMA’s Assistant 

Administrator at its policy development meeting in FY 2022 and developed better strategies for 

coordination. 

In response to Executive Order No. 14008, “Tackling the Climate Crisis at Home and Abroad,” the

Biden administration formed the Interagency Working Group on Coal and Power Plant 

Communities and Economic Revitalization to address dramatic economic challenges. This group, 

of which ARC is a member, has a mandate to “coordinate the identification and delivery of federal 

9 https://www.arc.gov/wp-content/uploads/2021/04/Coal-and-the-Economy-in-Appalachia_Q4_2020-Update.pdf

Figure 6 – Coal Mining Employment by Appalachian State
FY 2025 Performance Budget Justification—26

resources to revitalize the economies of coal, oil and gas, and power plant communities.”10 

Figure 7 shows the working group’s map of national focus areas. A total of 25 geographic areas, 

hard-hit by past coal mine and plant closures and vulnerable to more closures, were identified 

for priority investment and engagement. Eight of these areas are in Appalachia. Serving as the 

Chair of the Community Engagement Subcommittee enables ARC to deploy its special expertise 

to build the capacity of underserved communities and accelerate outreach to the most distressed 

or marginalized. This effort is complimented by the Biden administration’s Rural Partners 

Network led by the U.S. Department of Agriculture (USDA). In FY 2023, ARC partnered with the 

USDA and Kentucky Highlands Investment Corporation to host a forum in Appalachian Kentucky 

designed to build collaboration, capacity, and relationships by connecting community networks 

with targeted federal and civic partners. ARC will continue to support the mission of Interagency 

Working Group on Coal and Power Plant Communities and Economic Revitalization as well asthat 

of the Rural Partners Network with activities that promote job creation, infrastructure 

development, and community improvement.

Figure 7 – Coal Mining and Power Plant Closures, 2005–2020

The POWER Initiative is included in the Biden administration’s Justice40 initiative, an effort to 

ensure that federal agencies work with states and local communities to deliver at least 40% of 

the overall benefits from federal investments in climate and clean energy to disadvantaged 

10 https://www.whitehouse.gov/briefing-room/statements-releases/2021/04/23/fact-sheet-biden-administrationoutlines-key-resources-to-invest-in-coal-and-power-plant-community-economic-revitalization/
FY 2025 Performance Budget Justification—27

communities. From its inception in 2015, ARC has invested nearly $421.6 million in over 507

projects impacting 365 coal-impacted counties. A new evaluation conducted by 

Chamberlin/Dunn indicates that a majority of POWER projects met or exceeded output and 

outcome targets, with ARC’s investments projected to have helped create or retain more than 

53,000 jobs and over 142,000 workers and students for new opportunities in entrepreneurship, 

broadband, tourism, and other growing industries.11 A new round of grants was announced early 

in the first quarter of FY 2024. Figure 8 illustrates the cumulative number of ARC POWER projects 

by county funded to date. 

Figure 8 – ARC POWER Initiative Projects Per County Cumulative Through October 2023

11 https://www.arc.gov/report/power-initiative-evaluation-the-power-of-change/
FY 2025 Performance Budget Justification—28

POWER Initiative Funding: Examples of Projects

Bringing New Investment to Underserved Coal Communities

$1,499,850 – In FY 2023, ARC made a grant of $1,499,850 to Appalachian Community Capital 

(ACC), in Christiansburg, Virginia, for the Opportunity Appalachia—Expanding Opportunity: 

Bringing New Investment to Underserved Coal Communities project. The project will enable six 

participating Appalachian states—Virginia, Kentucky, North Carolina, Ohio, Tennessee, and West 

Virginia—to provide direct development technical assistance to 30 communities. Technical 

assistance providers will work with the communities, selected through a competitive process, to 

develop high-impact development projects with prospectus materials and project pitch videos 

and presentations. When the communities complete the investor prospectus materials, 

Opportunity Appalachia will reach out to pre-vetted investors directly and through a high-level 

investor convening. The following project partners will offer outreach and technical assistance to 

communities: Fahe (Kentucky), Mountain BizWorks (North Carolina), OhioSE, University of 

Tennessee, University of Virginia–Wise, and West Virginia Brownfields Assistance Center. 

National partners include Main Street America and Coastal Enterprises, Inc. The project is 

expected to serve and improve 30 businesses and communities, engage 600 participants, create 

1,200 jobs and 11 businesses, and leverage $150 million in private investment during the grant 

period and up to three years after.

Cybersecurity Workforce Development

$1,150,000 – In FY 2023, ARC made a grant of $1,150,000 to the LindenPointe Development 

Corporation (LDC) for the Pennsylvania Cybersecurity Center (PCC) project. With ARC’s 

investment, 300 workers/trainees will be prepared to grow the cybersecurity talent pipeline in 

Appalachian Pennsylvania. The PCC estimates there are 750,000 job openings in the 

cybersecurity industry nationally, yet the industry lacks equitable pathways for individuals to 

enter, especially to upskill or reskill workers in Appalachian Pennsylvania outside of the 

traditional higher education degree system. The proposed POWER project will enable the PCC to 

expand the geographic reach from Mercer County to the other seven counties in the Northwest 

Commission in Appalachian Pennsylvania and expand the numbers enrolled and placed in 

employment. The PCC supplements this coursework with a Cyber Range, a virtual environment 

where workers/trainees practice handling specific real-world scenarios as cyber professionals. 

PCC then recruits workers/trainees from partnering high schools, colleges, and adult workforce 

agencies, including the West Central Job Partnership. After training, the PCC places students into 

jobs within the cybersecurity and IT industry through their current and future employer 

partnerships. The project is anticipated to serve 455 workers/trainees through expanded cyber 

courses and wraparound services.
FY 2025 Performance Budget Justification—29

Enhance Access to Broadband Services

$2,497,161 – In FY 2022, ARC made a grant of $2,497,161 to Ashtabula County, Ohio, for the 

Connecting Underserved Ashtabula County, Ohio, project. The project will enable Ashtabula 

County to expand broadband access in underserved or unserved areas of the county. Ashtabula 

County businesses and residents who have never had access to this type of service will also need 

training and access support for the investment to be transformational. Through this project, 

broadband service will be made available to 2,986 unserved or underserved households and 90 

unserved or underserved businesses located across 14 communities.

Steamfitter’s Advanced Employment and Training Program 

$1,400,000 – In FY 2023, ARC made a grant of $1,400,000 to the Tri-County Workforce 

Investment Board, Inc., for the Building a Competitive Workforce to Boost Semiconductor 

Manufacturing in the ARC Region project. This project addresses the direct impact of coal-related 

job losses in 15 Western Pennsylvania counties by providing free training required to obtain jobs 

in the areas of HVAC-R, welding processes/building trades, semiconductor manufacturing, and 

building information modeling. Central to the project is a partnership with the Steamfitters Local 

Union 449 JATC, which will offer trainings at its Steamfitters Technology Center in Harmony, 

Pennsylvania, and utilize ARC funding to equip its orbital welding lab and semiconductor plastic 

fusion lab. Additionally, an outreach and recruitment campaign will be deployed to enroll 

workers in new training opportunities. With ARC’s investment, 550 workers/trainees will be 

trained to support the emerging market of semiconductor manufacturing and related industries.
FY 2025 Performance Budget Justification—30

Program Justification: Special Regional Initiative for Distress 

The Federal Co-Chair of the Appalachian Regional Commission (ARC, the Commission) requests 

$31 million in FY 2025 for Special Regional Initiatives for Distress in Appalachia to continue the 

effort to reduce the disproportionately high rate of economic distress in Appalachia. While the 

economic impact of COVID has yet to be fully realized, it will likely be significant in remote 

economically distressed areas. ARC uses this initiative to augment the existing work in distressed 

communitiesthrough the Area Development Base Program and the POWER Initiative. Challenges 

such as inadequate water, sewer, and broadband infrastructure continue to present significant 

barriers and require substantial resources. However, expansion of the southern automotive and 

aviation clusters continues to offer great potential for job creation and economic development. 

In FY 2024 the number of distressed counties will remain the same as the prior year at 82. The 

number of at-risk counties will decrease from 109 to 101. The number of transitional counties 

will increase from 218 to 225. The number of competitive counties will increase from 10 to 11. 

The effort to focus attention on distressed counties and areas, as well as on opportunities for 

economic transformation, must be maintained with additional funds. 

ARC was an early investor in the automotive 

manufacturing industry, with the Appalachian 

governors voting to allocate funding across 

multiple states to assist South Carolina in 

providing the necessary infrastructure for BMW 

to expand in the Appalachian Region (the 

Region). Twenty years later, in 2012, automotive 

cluster analysis found that BMW alone was 

responsible for creating 7,000 jobs. With the 

company’s growth, an extensive supplier 

network has developed in the state, thereby

creating additional jobs. 

ARC has continued to support development of 

this sector as a cluster of automotive 

manufacturers including Mercedes, Toyota, 

Mazda, and Honda and their supply chain 

partners continue to locate plants and add jobs 

Industrial Site Development in the Southern 

Automotive and Aviation Cluster 

In FY 2023, ARC made a grant in the amount of 

$1,000,000 to Lawrence County Commission in 

Alabama to make infrastructure improvements to the 

West Morgan – East Lawrence Water and Sewer 

Authority’s sewer and water system and the access 

road serving the facility. Match funds of $1,500,000

were provided by the state through the Community 

Development Block Grant (CDBG) program. This

project will help provide infrastructure needed for

First Solar Inc. to construct a more than $1 billion

plant to keep up with North America's growing

demand for solar energy. First Solar is the only U.S.-

headquartered solar manufacturer that is not

manufacturing in China. The company committed to 

create 715 jobs and will likely attract supply chain 

manufacturers to the area. 
FY 2025 Performance Budget Justification—31

throughout the southern Appalachian states. All those manufacturers have benefitted from ARC 

investments, primarily for the basic infrastructure and workforce training necessary to 

accommodate manufacturing operations. ARC recently funded training activities for the states of 

Alabama and Mississippi where Mazda Toyota Manufacturing, U.S.A., has a new manufacturing 

facility. This work will benefit employees needed to fill the projected 6,000 jobs that will become 

available. Additional opportunities are being explored in the energy sector, including 

development of an energy storage hub in Appalachia.

Despite the success in the southern automotive sector and new energy economy, nearly onefifth of Appalachia’s counties still suffer from persistent and severe economic distress, due 

primarily to the Region’s historic reliance on single-sector economic drivers like coal extraction 

and traditional manufacturing. Central Appalachia lags behind the nation in basic infrastructure 

availability. Roughly 20% of the Region’s population is not served by a community water system 

(compared with 12% of the rest of the nation’s population), and 47% of Appalachian households 

are not served by a public sewage system (compared with a national average of 24%).12 In FY 

2024, ARC contracted UNC Chapel Hill to update the state of water and sewer infrastructure in 

the Region. 

In addition, Appalachia, like most of rural America, continues to lag behind the nation in access 

to advanced telecommunications infrastructure. During the 2017–2021 period, 82.8% of 

Appalachian households had a broadband Internet subscription, more than four percentage 

points below the national average of 87%. There are also signs of a rural-urban digital divide 

within the Region: In 42 Appalachian counties, less than 70% of households had a broadband 

subscription. All but five of these counties were outside metropolitan areas, and almost half were 

in the most rural counties.13 This is an indicator that many communities in the Region may be at 

risk of being left behind.

14 In ARC’s 2015 reauthorization, Congress recognized the importance of 

Appalachian access to advanced telecommunications infrastructure by authorizing ARC to work 

in broadband deployment, and ARC continues to provide support and collaborate with other 

federal partners. 

These infrastructure conditions prompted Congress to provide special funding designated for 

improving water and sewer infrastructure in distressed counties in central Appalachia and 

broadband service in distressed counties in north and central Appalachia. To date, almost $60 

12EFC at UNC Chapel Hill, Drinking Water and Wastewater Infrastructure in Appalachia: An Analysis of Capital 

Funding and Funding Gaps 2005.

Estimated Use of Water in the United States County-Level Data for 2000, U.S. Geological Survey.

Estimated Use of Water in the United States County-Level Data for 2015, U.S. Geological Survey. 13 ARC Chartbook as compiled from American Community Survey Data (2017-2021). 14 U.S. Census Bureau’s 2020-2016 American Community Survey, as compiled in https://www.arc.gov/thechartbook/. 
FY 2025 Performance Budget Justification—32

million has been invested in KentuckyWired to develop broadband access throughout eastern 

Kentucky by the creation of a large middle-mile network. This project will bring enhanced 

broadband access to 119 community anchor institutions in eastern Kentucky and provide the 

platform necessary for providers to branch out and provide last-mile facilities in selected areas. 

Throughout FY 2025, ARC will continue to work with public and private sector partners to build 

community capacity; leverage opportunities, such as the growth of the southern automotive 

sector; and eliminate economic barriers, such as the lack of critical water, sewer, and broadband 

infrastructure, particularly in North and Central Appalachia. Outcome measures will be 

developed in conjunction with state and local partners as this initiative continues. Table 4 lists 

potential outcomes for project development.

Table 4 – Potential Outcomes for Project Development (Includes Funds for Administration) 

Potential Outcomes for Project Development

(Includes Funds for Administration)

Businesses improved

Communities improved

Households improved

Participants improved

Students improved

Workers and trainees improved

 
FY 2025 Performance Budget Justification—33

Program Justification: INSPIRE Initiative for Substance Abuse Mitigation 

The Federal Co-Chair of the Appalachian Regional Commission (ARC, the Commission) requests 

$13 million in FY 2025 to continue to implement INvestments Supporting Partnerships In 

Recovery Ecosystems (INSPIRE) to address Appalachia’s substance use disorder (SUD) crisis by 

creating or expanding a recovery ecosystem leading to workforce entry or re-entry. In addition 

to being considered a health and public safety issue, this problem is now recognized as a barrier 

to economic prosperity because of the impact of the drug crisis on the Appalachian Region’s 

workforce. The INSPIRE Initiative is included in the FY 2025 President’s National Drug Control 

Strategy through the Office of National Drug Control Policy. 

ARC’s INSPIRE Initiative supports activities in the post-treatment-to-employment continuum 

through a regionally competitive selection process. Eligible funding uses include the following:

• Support of healthcare networks and SUD recovery professionals. 

• Recovery-focused job training programs, including workforce reentry and employment 

retention, basic and advanced training, soft-skills development, up-skilling, and clear 

career pathways. 

• Coordination or linking of recovery services and training that support the recovery 

ecosystem and enable businesses to be recovery ready. 

Eligible applicants include but are not limited to states, local governments, and nonprofits both 

with and without 501(c)(3) status. Grants range in size from $15,000 for planning grants to 

$500,000 for implementation activities. 

Appalachia has been disproportionately impacted by the substance abuse crisis. In 2021, 

overdose-related mortality rate for the Region’s 25–54-year-old age group—those in their prime 

working years—were 72% higher than for the same age group in the country’s non-Appalachian 

areas.15 

15 CDC’s Multiple Cause of Death database, as compiled in ARC’s 2020 report, Appalachian Diseases of Despair. 
FY 2025 Performance Budget Justification—34

Figure 9 – The ARC Recovery Ecosystem

As illustrated in Figure 9, the recovery ecosystem is a complex linkage of multiple sectors, 

including but not limited to recovery communities, peer support, mental and behavioral health, 

human services, faith communities, criminal justice, public safety, housing, transportation, 

education, and employers organized and positioned to help individuals in recovery access the 

support services and the training they need to maintain recovery and successfully obtain 

sustainable employment. 

Through the 2018 SUPPORT (Substance Use–Disorder Prevention that Promotes Opioid Recovery 

and Treatment) for Patients and Communities Act, Congress recognized the severity of the 

substance abuse issue in Appalachia and provided special authorization for ARC to address this 

issue. ARC used its Substance Use Disorder Advisory Council to develop and launch activities to 

address significant barriers to recovery employment in the Appalachian Region (the Region). 

Siloed service delivery has complicated the burden of navigation and successful workforce 

reentry. 

Since INSPIRE was established in 2021, ARC has invested $43.4 million across 130 projects. 

Together, the projects will impact 349 Appalachian counties, improve 2,178 businesses, and help 

prepare 9,772 individualsfor new opportunities in the workforce. This continued funding reflects 

the Biden administration’s focus on this issue. In FY 2025, ARC will continue to use its grassroots 

delivery system by collaborating with state, local, other federal, and private sector partners to 

assist communities in better identifying these complex recovery connections. 

INSPIRE Initiative Funding: Examples of Projects

Expanding Successful Recovery Workforce Development Ecosystems to Create Lasting Pathways 

to Employment

$500,000 – In FY 2023, ARC made a grant to the WCI Educational Foundation (WCI-EF) to support 

the WNC Recovery Friendly Workplaces and Wellbeing Initiative, a collaboration between WCI-
FY 2025 Performance Budget Justification—35

EF and community partners that will build the SUD recovery ecosystem in 27 counties of western 

North Carolina by facilitating the development of Recovery Friendly Workplaces (RFW). This new 

program will provide comprehensive and coordinated employment support and recovery 

services, which people in recovery need to successfully enter or renter the workforce and 

maintain recovery. The program will also create opportunities for local businesses in need of 

workers to access a pool of highly qualified new employees in recovery, as well as retain good 

existing employees who may be experiencing a substance use disorder. By the end of the threeyear grant period, an estimated 20 businesses will be improved and designated as Recovery 

Friendly Workplaces, and 112 program participants will be improved with workforce support and 

wraparound services and will secure employment in Recovery Friendly Workplaces.

Recovery Reintegration Program – Lincoln, Pulaski, Rockcastle 

$465,208 – In FY 2023, ARC made a grant to Volunteers of America Mid-States, Inc., in Louisville, 

Kentucky, for the Recovery Reintegration Program—Lincoln, Pulaski, Rockcastle project. The 

Recovery Reintegration Program will provide career planning, job placements into in-demand 

positions with recovery-friendly employers, and career advancement assistance to 

underemployed individuals seeking higher-paying jobs. Job training programs will focus on 

healthcare, trades (electrical lineman, welding, plumbing, etc.), transportation (commercial 

driving license), technology, peer support certifications, and other positions to be identified 

based on the individual's skills and interests, and availability at local educational providers. 

Through partnerships with Goodwill Industries of Kentucky, Daniel Boone Community Action 

Agency, and Kentucky Chamber Foundation, the project will improve 60 participants through 

employment attainment; improve 65 businesses through increased SUD knowledge and/or by 

the hiring of individuals in recovery; and improve three communities through increased 

workforce knowledge, skills, and abilities of residents in recovery.

The Lovelady Center 

$500,000 – In FY 2023, ARC made a grant to the Lovelady Center (TLC), located in Birmingham, 

Alabama, for the Recovery-to-Work: Expanding Recovery and Employment Services to 

Appalachia project. TLC will use funding to expand its current services of counseling and mental 

health support, adult education, and wraparound services to women across Appalachian 

Alabama’s 37 counties. TLC will address workforce participation challenges through counseling 

and mental health support, conducted by three full-time licensed professional counselors and

assist in participants’ recovery from past trauma and SUD adult education. GED certification and 

job training for medical-focused fields, including certified nursing assistant and medical 

transcription training will be provided as well as a myriad of wraparound services, including but 

parenting, financial literacy, and life skills classes. The project is expected to serve 875 

workers/trainees.
FY 2025 Performance Budget Justification—36

Recovering Together: A Community Outreach and Employment Project to Combat Substance 

Abuse in Appalachia

$478,000 – In FY 2023, ARC made a grant to the West Virginia Drug Intervention Institute (WVDII), 

in Charleston, West Virginia, for the Recovering Together: A Community Outreach and 

Employment Project to Combat Substance Abuse in Appalachia. In partnership with the Police 

Assisted Addiction and Recovery Initiative (PAARI), ONEbox LLC, and HarborPath, WVDII will 

establish a new community outreach and employment program to combat the economic effects 

of SUD and build a stronger recovery ecosystem across 15 high-risk counties in West Virginia and 

Kentucky. The program will provide employment opportunities for up to 10 individuals in 

recovery and/or the justice system, working with local police departments and the PAARI 

Recovery Corps to educate community members about the use of the overdose reversal drug 

naloxone, overdose prevention, and SUD treatment and recovery resources. Through training, 

education, certifications, and wraparound support services, the project will help to increase the 

number of addiction professionals in areas of high need; support local businesses and industry 

by increasing the number of trained and job-ready individuals; and increase law enforcement's 

knowledge of non-arrest pathways to treatment and recovery to build a healthier and more 

productive workforce in Appalachia. The project is expected to serve 10 workers/trainees, 400 

businesses, and 300 participants, including law enforcement and public safety employees.
FY 2025 Performance Budget Justification—37

Performance and Evaluation 

The Appalachian Regional Commission (ARC, the Commission) is a performance-driven 

organization with a systematic program for performance measurement in place, in accordance 

with its strategic plan, titled Appalachia Envisioned: A New Era of Opportunity | ARC Strategic 

Plan Fiscal Years 2022–2026. The strategic plan establishes both long- and short-term goals and 

performance measures to track progress in meeting the agency’s mission. Feedback from the 

comprehensive information gathering sessions yielded goals and objectives in a framework with 

pillars of resilience, innovation, sustainability, and equity. A multi-level evaluation system was 

designed in accordance with the Government Performance and Results Act and the EvidenceBased Policymaking Act. Funding provided through the Infrastructure Investment and Jobs Act

(IIJA) enabled ARC to extend the reach of research and evaluation activities by providing 

additional funding from the IIJA to enhance program evaluation and analyze a variety of regional 

issues and trends in economic development. 

Grant information and performance is tracked by ARC’s grants management system, ARCnet. 

Data elements are geared to performance measures and strategic objectives from the strategic

plan. As each grant is closed, ARC staff collects output and outcome information and tracks data

against anticipated performance. The performance data is validated through a process that 

confirms project outcomes three years after the projects have been completed. The three-year

period allows ARC to accurately capture data on performance measures, which can continue to 

accrue after a project has been completed.

ARC conducts an outside evaluation of each strategic goal area on a rotational basis. Each study

assesses how well ARC projects met their projected performance targets and offers

recommendations for ways to improve the grants process. This information is published on the

ARC website and used to guide future Commission policy. ARC performance is published annually

in its Performance and Accountability Report, which is available on the agency’s website at

www.arc.gov.
FY 2025 Performance Budget Justification—38

Table 5 – Summary of Achievements: Performance Targets and Initial Estimates for FY 2023 Projects

ARC’s annual performance targets are established in the agency’s 2022–2026 strategic plan. The 

performance targets assume level funding with the $180 million appropriation in place at the 

time of strategic plan development. Table 5 delineates the FY 2023 targets and their expected 

outcomes. 
FY 2025 Performance Budget Justification—39

Figure 10 – Progress Toward ARC Strategic Plan Performance Goals, Fiscal Years 2022–2026
FY 2025 Performance Budget Justification—40

Salaries and Expenses 

The Federal Co-Chair of the Appalachian Regional Commission (ARC, the Commission) requests 

$14.22 million forsalaries and expenses associated with a requested Area Development Program 

funding level of $200 million for FY 2025. The costs associated with administration of the 

$1 billion in the Infrastructure Investment and Jobs Act are not included in this request. 

Table 6 – Area Development Salaries and Expenses Detail

This request reflects the Commission programmatic costs and the federal share of Commission 

administrative expenses, the full costs of the Office of the Federal Co-Chair, its immediate staff, 

the Office of the Inspector General. Individual requests are presented on the pages that follow.

FY2024 FY2025

FY2023 Continuing President's

Enacted Resolution Budget Change

Operating Expenses

Commission Administration (50% Federal Contribution) 3,663 3,813 3,851 38

Commission Programmatic 6,341 6,321 6,306 (15)

Office of the Inspector General 1,403 1,566 1,648 82

Office of the Federal Co-Chair 2,104 2,291 2,415 124

Total 13,511 13,991 14,220 229

Local Development Districts1 8,000 8,000 8,000 -

Funded exclusively through Base Program

ARC Operating Expenses

($ in thousands)
FY 2025 Performance Budget Justification—41

Table 7 – Office of the Federal Co-Chair Detailed Budget

The request for the Office of the Federal Co-Chair shown in Table 7 provides for an immediate 

staff of 10 employees including portions of shared Commission staff and related benefits, rent, 

travel, services, and other expenses. This staff is tasked with assisting in carrying out the Federal 

Co-Chair’s responsibilities. These include working with federal agencies; serving as the 

Commission’s liaison to Congress and the federal administration; representing the administration 

in working with the member states to formulate regional strategies and other policy; and 

reviewing projects for final approval by the Federal Co-Chair. 

2024 2025

2023 Continuing President's

Enacted Resolution Budget Changes

Personnel Compensation 1,043 1,203 1,261 58

Personnel Benefits 310 337 353 16

Travel & Transportation 150 150 190 40

Rent, Communications 260 260 270 10

Printing 1 1 - 1 

Services 300 300 300 -

Supplies 20 20 20 -

Equipment 20 20 20 -

Total 2,104 2,291 2,415 124

Office of the Federal Co-Chair

($ in thousands)
FY 2025 Performance Budget Justification—42

The Office of Inspector General (OIG) provides audit, oversight, and investigative support services 

covering all of ARC’s programs and strategic operations. Its mission is to promote and preserve 

the Commission’s effectiveness, efficiency, and integrity. Table 8 details the OIG’s budget 

request. The OIG will use contractor support to perform the independent audit of ARC’s annual 

financial statement and to audit ARC grantees’ use of grant funds. In addition to these reviews, 

and based on available resources, the OIG will identify other areas to audit. The OIG request also 

includes funds for travel and training to meet the office’s continuing requirements for 

professional education for audit, technical knowledge, and other skills. The Commission’s budget 

request contains resources to support OIG’s five full-time staff members and has been certified 

by the Inspector General.

2024 2025

2023 Continuing President's

Enacted Resolution Budget Changes

Personnel Compensation 579 702 769 67

Personnel Benefits 155 195 210 15

Travel & Transportation 6 12 12 -

Rent, Communications 51 64 67 3

Printing - - - -

Services 582 558 555 (3)

Supplies 10 12 12 -

Equipment 20 23 24 1

Total 1,403 1,566 1,648 82

Office of the Inspector General

($ in thousands)

Table 8 – Office of the Inspector General Detailed Budget

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
FY 2025 Performance Budget Justification—43

Table 9 – Commission Operations Detailed Budget

The Commission operating budget is shown in Table 9. ARC’s authorizing legislation specifies 

that Commission staff shall not be considered federal employees for any purpose. Accordingly, 

these 85 professionals are neither state nor federal employees, even though they work directly 

for the joint federal-state partnership entity. An Executive Director, who is appointed by the 

states and the Federal Co-Chair, manages this staff and is the Chief Executive Officer of the 

Commission. This request addresses the Inspector General’s identification of staff size as a 

potential challenge for ARC with the appropriation level now stable at an increased level.

Each year, the states and the Federal Co-Chair must approve the Commission’s operating budget. 

Following completion of appropriations action, final non-federal staffing decisions are made and 

must be approved at a Commission meeting of the member states with the Federal Co-Chair. As 

a result of this consultative process, final allocations may differ from the estimates of operating 

expense amounts by object class for FY 2025. Table 9 shows the Commission operating expenses.
FY 2025 Performance Budget Justification—44

Operational Effectiveness Initiative 

ARC Dashboard: Operational Effectiveness Initiatives 

The Appalachian Regional Commission (ARC, the Commission) continues to identify, analyze, and 

implement workplace efficiencies to ensure equity and the highest possible output using costand time-effective resources. ARC proactively makes these decisions during its normal course of 

business while adjusting to internal and external forces that demand innovation and evolution. 

Below, ARC has documented ongoing and completed actions to improve efficiency and 

effectiveness. These actions enhance ARC’s mission.

• Program staff has been divided into two separate divisions, each with its own Division 

Director: 

o Division of Critical Infrastructure, including all investments and opportunities 

pertaining to broadband, transportation, and other regional infrastructure needs. 

o Division of Business and Workforce Investment, including all investments and 

opportunities pertaining to workforce development, entrepreneurship, 

education, health, and other issues affecting the Appalachian Region’s workforce. 

• Human capital continues to be a major focus as the size and composition of staff evolves 

to meet the needs of the Region and to implement the new strategic plan and increased 

funding level. The Executive Director offers weekly office hours to ensure employees can 

raise questions, make suggestions, and maintain open lines of communication. All-staff 

meetings are held every two weeks. They provide a forum to share updates, successes, 

and information throughout the organization while fostering employee engagement and 

minimizing silos. New programs have been launched to improve employee experience in 

the following ways:

o ARC has increased self-service through automation for new and existing staff,

providing a single platform to address most needs. New staff are engaged early in 

the onboarding process and existing staff are engaged through regular branded 

internal communications. 

o As a transition to our post-COVID-19 environment, ARC increased the regularity 

and variety of events that provide opportunities for staff interaction. This includes 

a program where existing staff meet and engage with all new hires and new
FY 2025 Performance Budget Justification—45

informal monthly gatherings to promote development of interdivisional

relationships. Virtual collaboration using multiple platforms has also been 

accelerated.

• Planning & Research Division has reorganized to better reflect the division’s focus on 

research, evaluation, and analysis. A multi-level evaluation system has been implemented 

in accordance with the Government Performance and Results Act and the Evidence-Based 

Policymaking Act. Each year this division hires two paid interns from learning institutions 

in the Region to assist with the annual project validation process. 

• In accordance with the SECURE Technology Act, ARC has established a separate 

Information Technology (IT) division. The division has a dedicated Division Director and 

additional IT staff to completely evaluate all of ARC’s cybersecurity systems and 

implement technological enhancements that will increase security, workforce efficiency,

and customer satisfaction as required by Executive Order No. 14028. Specific activities 

include the following:

o ARCnet, ARC’s current grants management system, was reviewed to guide 

direction on future functionality. A selection and acquisition process followed the 

review, and a subsequent implementation of and migration to a replacement 

system began in FY 2023. 

o ARC reviewed its cybersecurity posture at the end of FY 2021. In response, it is 

taking steps to formalize a new cybersecurity program. Auditing and inventory 

software are being improved and network monitoring and implementation of

organization-wide multi-factor authentication was completed in FY 2023. A new 

staff training and awareness program has been initiated, and system password 

management tools have been improved. In the near future, ARC will migrate to a 

cloud-based endpoint management system more appropriate to its remote, 

mobile staff.

o ARC has migrated its on-premises server systems to more reliable and secure 

cloud-based infrastructure.

o Several updates are required to support the increased volume of work ARC will 

experience. An upgraded wireless network to improve service to staff as well as 

improved production and printing facilities are planned.

• In accordance with Executive Order No. 14058, “Transforming Federal Customer 

Experience and Service Delivery to Rebuild Trust in Government,” ARC initiated service 

mindset training in FY 2024. This training will deliver cross-divisional workshops that 

advance knowledge in process improvement principles that benefit our partners and 
FY 2025 Performance Budget Justification—46

stakeholders. The workshops will develop skills oriented to providing a consistent, 

solution-oriented environment and to enhance communication and problem-solving 

techniques. The results of this training will improve responsiveness and service delivery 

to our stakeholders and improve cross-divisional processes. 

 
FY 2025 Performance Budget Justification—47

Appendix A 

High-Poverty Counties in the Appalachian Region, 1960 and 2017–2021

 
FY 2025 Performance Budget Justification—48

Appendix B 

County Economic Status in Appalachia, FY 2024 
FY 2025 Performance Budget Justification—49

County Economic Status Designations in the Appalachian Region, FY 2024

The Infrastructure Investment and Jobs Act reauthorized ARC in FY 2022 and added three 

additional counties to the Appalachian Region, bringing the total from 420 to 423 counties. In 

accordance with the Commission's policy for determining the economic status of the Appalachian 

counties, the research staff has analyzed the distribution of distressed, at-risk, transitional, 

competitive, and attainment counties for FY 2024 using the most current data available. ARC uses 

an index-based county economic classification system to identify and monitor the economic 

status of Appalachian counties. The system involves the creation of a national index of county 

economic status through a comparison of each county’s averages for three economic 

indicators—three-year average unemployment rate, per capita market income, and poverty 

rate—with national averages. The resulting values are summed and averaged to create a 

composite index value for each county. Each county in the nation is then ranked, based on its 

composite index value, with higher values indicating higher levels of distress.

Distressed Counties (82)

• Alabama (2) – Hale and Macon 

• Georgia (2) – Chattooga and Elbert 

• Kentucky (36) – Bath, Bell, Breathitt, Carter, Casey, Clay, Clinton, Elliott, Estill, Floyd, 

Harlan, Jackson, Johnson, Knott, Knox, Lawrence, Lee, Leslie, Letcher, Lewis, Magoffin, 

Martin, McCreary, Menifee, Metcalfe, Morgan, Owsley, Perry, Pike, Powell, Rockcastle, 

Rowan, Russell, Wayne, Whitley, and Wolfe 

• Mississippi (9) – Chickasaw, Clay, Kemper, Montgomery, Noxubee, Oktibbeha, Panola, 

Winston, and Yalobusha 

• Ohio (4) – Athens, Meigs, Noble, and Scioto 

• Pennsylvania (1) – Forest 

• South Carolina (1) – Union 

• Tennessee (5) – Bledsoe, Clay, Cocke, Hancock, and Scott 

• Virginia (4) – Buchanan, Dickenson, Lee, and Wise (+ Norton city) 

• West Virginia (18) – Barbour, Boone, Braxton, Calhoun, Clay, Fayette, Lincoln, Logan, 

McDowell, Mingo, Nicholas, Roane, Summers, Upshur, Webster, Wetzel, Wirt, and 

Wyoming 

At-Risk Counties (101)

• Alabama (6) – Bibb, DeKalb, Etowah, Fayette, Pickens, and Talladega 

• Georgia (4) – Franklin, Heard, Murray, and Polk 
FY 2025 Performance Budget Justification—50

• Kentucky (15) – Adair, Boyd, Cumberland, Edmonson, Fleming, Green, Greenup, Hart, 

Laurel, Lincoln, Monroe, Montgomery, Nicholas, Pulaski, and Robertson 

• Mississippi (10) – Benton, Calhoun, Choctaw, Lowndes, Marshall, Monroe, Prentiss, 

Tippah, Tishomingo, and Webster 

• New York (3) – Allegany, Cattaraugus, and Chautauqua

• North Carolina (6) – Alleghany, Cherokee, Cleveland, Graham, Jackson, and Rutherford 

• Ohio (15) – Adams, Ashtabula, Coshocton, Gallia, Guernsey, Highland, Jackson, 

Jefferson, Lawrence, Mahoning, Monroe, Morgan, Pike, Trumbull, and Vinton 

• Pennsylvania (2) – Cameron and Fayette 

• South Carolina (1) – Cherokee 

• Tennessee (19) – Campbell, Carter, Claiborne, Fentress, Greene, Grundy, Hawkins, 

Jackson, Johnson, Lewis, Macon, Meigs, Morgan, Pickett, Rhea, Sequatchie, Unicoi, Van 

Buren, and Warren

• Virginia (8) – Carroll (+ Galax city), Grayson, Henry (+ Martinsville city), Montgomery (+ 

Radford city), Russell, Scott, Smyth, and Tazewell 

• West Virginia (12) – Cabell, Gilmer, Greenbrier, Hardy, Jackson, Lewis, Mason, Mercer, 

Pocahontas, Raleigh, Randolph, and Wayne 

Transitional Counties (225)

• Alabama (27) – Blount, Calhoun, Chambers, Cherokee, Chilton, Clay, Cleburne, Colbert, 

Coosa, Cullman, Elmore, Franklin, Jackson, Jefferson, Lamar, Lauderdale, Lawrence, 

Limestone, Marion, Marshall, Morgan, Randolph, St. Clair, Tallapoosa, Tuscaloosa, 

Walker, and Winston 

• Georgia (26) – Banks, Barrow, Bartow, Carroll, Catoosa, Dade, Douglas, Fannin, Floyd, 

Gilmer, Gordon, Gwinnett, Habersham, Hall, Haralson, Hart, Lumpkin, Madison, Pickens, 

Rabun, Stephens, Towns, Union, Walker, White, and Whitfield 

• Kentucky (3) – Clark, Garrard, and Madison 

• Maryland (3) – Allegany, Garrett, and Washington 

• Mississippi (5) – Alcorn, Itawamba, Lee, Pontotoc, and Union 

• New York (11) – Broome, Chemung, Chenango, Cortland, Delaware, Otsego, Schoharie, 

Schuyler, Steuben, Tioga, and Tompkins 

• North Carolina (25) – Alexander, Ashe, Avery, Buncombe, Burke, Caldwell, Catawba, 

Clay, Davie, Forsyth, Haywood, Henderson, Macon, Madison, McDowell, Mitchell, Polk, 

Stokes, Surry, Swain, Transylvania, Watauga, Wilkes, Yadkin, and Yancey 
FY 2025 Performance Budget Justification—51

• Ohio (11) – Belmont, Brown, Carroll, Columbiana, Harrison, Hocking, Muskingum, Perry, 

Ross, Tuscarawas, and Washington 

• Pennsylvania (47) – Allegheny, Armstrong, Beaver, Bedford, Blair, Bradford, Cambria, 

Carbon, Centre, Clarion, Clearfield, Clinton, Columbia, Crawford, Elk, Erie, Fulton, 

Greene, Huntingdon, Indiana, Jefferson, Juniata, Lackawanna, Lawrence, Luzerne, 

Lycoming, McKean, Mercer, Mifflin, Monroe, Northumberland, Perry, Pike, Potter, 

Schuylkill, Snyder, Somerset, Sullivan, Susquehanna, Tioga, Union, Venango, Warren, 

Washington, Wayne, Westmoreland, and Wyoming 

• South Carolina (4) – Anderson, Oconee, Pickens, and Spartanburg 

• Tennessee (27) – Anderson, Blount, Bradley, Cannon, Coffee, Cumberland, DeKalb, 

Franklin, Grainger, Hamblen, Hamilton, Jefferson, Lawrence, Loudon, Marion, McMinn, 

Monroe, Overton, Polk, Putnam, Roane, Sevier, Smith, Sullivan, Union, Washington, and 

White 

• Virginia (12) – Alleghany (+ Covington city), Bath, Bland, Craig, Floyd, Giles, Highland, 

Patrick, Pulaski, Rockbridge (+ Buena Vista city + Lexington city), Washington (+ Bristol 

city), and Wythe 

• West Virginia (24) – Berkeley, Brooke, Doddridge, Grant, Hampshire, Hancock, Harrison, 

Kanawha, Marion, Marshall, Mineral, Monongalia, Monroe, Morgan, Ohio, Pendleton, 

Pleasants, Preston, Putnam, Ritchie, Taylor, Tucker, Tyler, and Wood 

Competitive Counties (11)

• Alabama (1) – Madison

• Georgia (3) – Dawson, Jackson, and Paulding

• Ohio (2) – Clermont and Holmes

• (2) – Butler and Montour

• South Carolina (1) – Greenville

• Tennessee (1) – Knox

• West Virginia (1) – Jefferson

Attainment Counties (4)

• Alabama (1) – Shelby 

• Georgia (2) – Cherokee and Forsyth

• Virginia (1) – Botetourt 
FY 2025 Performance Budget Justification—52

Appendix C 

ARC Organization